Ratu,
Only a fool would discount what you've written in your
post. I am asking some very tough questions because of you
and Chicago. It might seem that way at times, but I really don't
have my head in the clouds on this company. In terms of publicly
available data, the prospects for GOFH ( on you guys are spot
on in this regard ) look quite dim. And you are so very correct about
the content costs and marginal (at best) revenue that flows from it.
To be quite honest, as I've mentioned before, I'm not betting on
GOFH.
I'm betting on the people at the company. And they are painfully
aware
of the problems that they are facing. From what I hear, they are
really
focusing on delivering strong revenue growth in the 3rd and 4th
quarter.
They know they can't get there by organic growth alone, and so they
are
really working their network of entertainment and media contacts. And
this
approach is showing some early signs of success. Now this is really
vague
I know, but I hope everyone can read between the lines. If not, I have
two
words for you...Peter Guber.
On the strength of what GOFH is reported to be working on internally,
I'd be shocked
if they are not back above $6 per share, by end of year.
On another note, Rat/ Chicago....what do you think, is there a market
for a MFI program
like WallStrip that gives a voice to the people behind the companies
on the smaller exchanges?
While at the same time providing much needed information to the
investors that follow them?
Who knows, maybe we can sell the idea to GOFH :-)
ratu
...@gmail.com wrote:
> Brooke,
> Thank you for your thoughtful reply.
> >But to say that this company ( stock ) has NO intrinsic value is both
> >vague and misleading.
> Perhaps it is a matter of opinion. Looking at the financials where
> their costs are >100x their revenues, I don't know how they are going
> to pull it off. The video development business is expensive -- at
> least GOFH's is, based on their quarterly expenses to date. And site
> ads alone generate only a fraction of a cent per page view. Site ad
> based revenue may work for google with billions of page views and
> inexpensive, algorithm-generated content, but is a poor business model
> for a higher-cost business. There is no other visible revenue for
> GOFH, and it doesn't seem to me that even a dramatic increase in ad
> revenue will come close to making their expenses. Nor do they seem to
> be very successful in attracting the kind of user-generated content
> that metacafe.com and other video sites have.
> I have studied GOFH and its data available and model carefully for
> some months. I finally got out when I realized, as I said, that there
> is no bottom to the stock price because -- IMO -- the stock has no
> intrinsic worth. Yes, their content has *some* worth, but the worth is
> *less* than the cost to produce -- at least that is certainly the
> direction that the data points. The liabilities outweigh the
> assets.
> How long will GOFH last? It is not a good acquisition target, so it
> will probably last as long as people are willing to pour new money
> into the firm by private or public financing. Someday people will
> realize that GOFH is, so to speak, a bottomless pit that will likely
> always eat more revenue than it produces, and will stop funding it
> through public or private investment. Then the firm will go belly-up
> or will be forced into bankruptcy, or be acquired by some third party
> (that will restructure drastically) for pennies on the dollar.
> Yet short of daydreaming that GOFH is the next YouTube -- daydreams
> that are untenable for reasons I have previously discussed -- I see no
> way that GOFH will succeed financially. There are good, NASDAQ-listed
> firms that get beat up well on Wall Street for minor revenue
> shortfalls or failing to meet expectations. GOFH is orders of
> magnitude away from them...not even in the same ballpark.
> Perhaps I am wrong. Maybe they have aces up their sleeve that I
> haven't seen. I hope for their sake, and that of their stockholders,
> that they will do well. It is again a speculative stock -- one with
> terrible fundamentals (How many multiples of 100 is the PE?) and a
> bad business model. Caveat emptor.
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